The changes in margins will have positive implications for ICI Pakistan Limited (ICI) and negative for Lotte Chemical Pakistan Limited (LOTCHEM).

PSF margins increased by 18.1 percent MoM to an average of USD 336/ton during January 19. The uptick in margins was witnessed due to decline in prices of Purified Terephthalic Acid (PTA) and Mono Ethylene Glycol (MEG), down by 2.6 percent MoM (Average: USD 820/ton) and 7.6 percent MoM (Average: USD 636/ton), respectively.

The MEG prices are at a 28-month low after September 2016. “Ample product availability coupled with dull buying sentiment contributed to the price fall,” Rai Aamir at Arif Habib Limited said.

However, PSF prices went up by 18.1 percent MoM. On YoY basis, margins are 40.4 percent higher than current month’s numbers.

After making an 87-month high of USD 480/ton last month, PVC margins are now down by 1.8 percent MoM to an average of USD 472/ton during January 2019. The decline in margins is owing to a 6.2 percent MoM rise in Ethylene prices. “Higher upstream costs, strong demand and constrained product availability pushed prices upward,” Rao said.

However, PVC prices also went up by 1.8 percent MoM to an average of USD 889/ton. On YoY basis, PVC margins are 78.3 percent higher.

PTA margins went down by 19.9 percent MoM to an average of USD 133/ton in January 2019. Decline in margins is due to 1.7 percent rise in PX prices. Strong buying and firmer upstream prices together supported the price rise. The decline in margins was also supported by 2.6 percent MoM decline in PTA prices. On YoY basis, PTA margins are 15.3 percent higher. [the_ad id="32940"]